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TMI Blog2019 (2) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... tock Exchange of 50 denominations and submitted the same to 2nd appellant to transfer the said shares in his name. Name of Seller Folio No Certificate No. Distinctive No 1 Rukhmaniben Babulal SB2541954 1634923 333094801 to 33094850 2 Urvi B Shah SB2549950 1643232 333510251 to 333510300 3 Jolly Champaklal Shah SB1797766 871509 294924101 to 294924150 4 Kamlesh Bhuderji Thakker SB1329225 386109 270654101 to 270654150 3. The original transfer deeds pertaining to Sl.No.2 to 4 of the above shares are with the 1st respondent and the documents in respect of Sl.No.(1) have been lost/misplaced (Page 66). The above shares were sent to 2nd appellant for transfer and the 2nd appellant intimated that the signature of transferor on transfer deed is not matching and requested 1st respondent to remove the objections and return the transfer deed to 2nd appellant. 1st respondent also written to 2nd appellant to stop transfer of shares purchased by him. 1st respondent had written a letter dated 10.11.2014 to 2nd appellant to know about the status of shares standing in the name of 2nd to 5th respondent. 2nd appellant vide letter dated 24.11.2014 intimated that the share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of the shares. Para 6 is reproduced below: "6 With reference to para 8 of the petition, it is respectfully submitted that the Petitioner had lodged only two certificates (i.e. 100 shares) -i) share Certificate No.1634923 bearing distinctive Nos 33094801 to 33094850 in the year 2002 and ii) share certificate No.386109 bearing distinctive Nos.270654101 to 270654150 in the year 2011 for transfer in his name, but because the transferor's signature in the relevant transfer applications being different, the said certificates were returned under objections to the Petitioner. As such, the contentions of the Petitioner that the shares wrongly exist in name of Respondent Nos. 3 to 6 are denied. Further, it is respectfully submitted that since the Petitioner has submitted the transfer applications for only 100 shares out of 200 shares as stated in plaint, the provisions of Section 58(4) and 59 of Companies Act, 2013 will not be applicable to balance 100 shares as it has not been submitted by the Petitioner to the Respondent No.2 for transfer in his name." 8.5 Few Respondents mainly Respondent No.5 has stated in the Affidavit in Reply that the shares were lost by him and the claimant Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd limitation. 9. 1st appellant raised the issue that the 1st appellant is not a Company registered under the provisions of Companies Act, 2013 and it is a body corporate constituted and incorporated under State Bank of India Act, 1955 which was enacted before the enactment of Companies Act, 1956 and, therefore, the NCLT would have no jurisdiction to entertain or try the disputes pertaining to transfer of equity shares issued by State Bank of India. 10. 1st appellant stated that the NCLT erred in not following its previous order dated 3.5.2017 passed by the Company Law Board, Western Region, Mumbai in the case of Tirupati Trade Communication Vs SBI (Company Petition No.20/111A/CLB/WR/2006) wherein it has been categorically held that since SBI is neither formed nor registered under Companies Act and has been constitute even prior to the enactment of the Companies Act, 1956, hence the petition under the Companies Act against SBI is not maintainable. 1st appellant further stated that the NCLT should have followed its previous order dated 3.5.2017. 1st appellant further stated that the reference to the case of Ms Natali Vs SBI was completely misplaced particularly keeping in view tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng companies, except in so far as the said provisions are inconsistent with the provisions of the Banking Regulations Act, 1949. 1st respondent further stated that the inferior courts are bound to apply the legal principles set down by superior courts in earlier cases, while a persuasive precedent is one which is not absolutely binding on a count by which may be applied. 18. 1st respondent submitted that the Tribunal has jurisdiction to decide a complaint regarding non-transfer of shares. 1st respondent further submitted that Section 430 of the Companies Act, 2013 specifically bars the jurisdiction of the Civil Court. 1st respondent submitted that the petition was filed before the Tribunal was for transfer of 200 shares and the petition is allowed for 100 shares of SBI, which were lodged by the 1st respondent and were rejected by the appellant. It is further stated that Section 59 of the Companies Act, 2013 empowers the Tribunal to decide all issues. 1st respondent submitted that the appellant did not appear before the Civil Court thereby deciding not to contest the case. 1st respondent submitted had there been any disputed question of fact then appellant would have contested the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the appeal has been filed in a casual manner. 24. Now we come to the main issue which is the core issue raised by the 1st appellant that State Bank of India is not a Company registered under the provisions of Companies Act and it is a body corporate constituted and incorporated under SBI Act, 1955 which was enacted before the enactment of Companies Act, 1956 and, therefore, NCLT would have no jurisdiction to entertain or try the disputes pertaining to transfer of equity shares. 1st appellant also relied upon the judgement pronounced by Company Law Board in the case of Tirupati Trade Communication wherein the CLB had decided that SBI is neither formed nor registered under Companies Act and has been constituted prior to the enactment of the Companies Act, 1956, therefore, the petition under the Companies Act, 1956 is not maintainable. 25. On the other hand 1st respondent argued that Company Law Board/National Company Law Tribunal has jurisdiction to decide the issue of rejection of transfer being the constituted authority to deal with all kind of matters where power is given. 1st respondent further argued that Section 1(4) of Companies Act, 2013 states that the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntertain or try the disputes pertaining to transfer of equity shares. 27. The other issue raised by the appellant that when the petition before the NCLT is not maintainable then the provision of Section 430 would not be applicable. 28. 1st respondent argued that the NCLT has jurisdiction to entertain petition as per section 430 of the Act. 29. Section 430 of the Act is as under: "430. Civil Court not to have jurisdiction- No civil Court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Tribunal or the Appellate Tribunal is empowered to determine by or under this Act or any other law for the time being in force and no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Ac or any other law for the time being in force, by the Tribunal or the Appellate Tribunal." Since we have held that the NCLT has the jurisdiction to entertain or try the disputes pertaining to transfer of equity shares, therefore, Section 430 of Companies Act, 2013 would be applicable. The civil suit filed by the 1st respondent is already withdrawn. Further in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rightful owner of these shares by filing Civil Suit and Company Petition before the appropriate Court/Tribunal. Now the question arises that the shares have not been transferred in the name of 1st respondent due to mismatch of signatures of transferor. On this issue, similar complaints were also received by the concerned department that the companies are not effecting transfer of shares in the names of transferees on frivolous grounds, inter alia, that the specimen signatures of transferors do not tally with that on record, in spite of the fact that the transfer forms bear attestation of the magistrates etc. Ministry of Finance, Department of Economic Affairs issued instructions vide No.1/10/SE/83 dated 21.7.1983. The said instructions also contain guidelines on good and bad delivery. It was also directed to the member companies to follow the instructions scrupulously and to effect transfer of shares within the period prescribed under Section 113 of the Companies Act, 1956 and the listing guidelines (Circular No.3 of 1993 dated 22.3.1993. In this regard as it is established the original transferor has not appeared before the NCLT and also have not appeared before this Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Major mismatch/Non-availability of transferor's signature: As per procedure laid down in LODR, in case of non-availability/major mismatch in transferor's signature the transferor is required to update his/her signature by submitting bank attested signature alongwith an affidavit and cancelled cheque to the RTA/company. Multiple instances have been brought to the notice in such cases, where the transferor did not take efforts to update his signatures since he had already received the consideration for the transfer. Further in many cases, the transferors could not be traced now. Accordingly, following procedure/documentation shall be followed for registration of transfer of securities, in such cases: i. RTA/company shall follow the procedure as laid down in Para (B)(2) of Schedule VII of LODR for major difference or non-availability of signature of the transferor(s). ii. Issuers/RTAs shall make efforts to contact the transferor: 1. By checking the Dividend history and obtaining the current contract details from the bank where dividend was encashed. 2. From the address, email IDs and phone numbers, if any, available with the Depositories/KRA. iii. In case of non-deliver ..... X X X X Extracts X X X X X X X X Extracts X X X X
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